Stock Code: Shenzhen Coship Electronics Co.Ltd(002052) stock abbreviation: ST TongZhou Announcement No.: 2022036 Shenzhen Coship Electronics Co.Ltd(002052)
Announcement on the reply to the inquiry letter of the 2021 Annual Report
The company and all members of the board of directors guarantee that the content of information disclosure is true, accurate and complete without falsehood
False records, misleading statements or material omissions.
Shenzhen Coship Electronics Co.Ltd(002052) (hereinafter referred to as “the company” and “Coship Electronics”) received the inquiry letter on the annual report of Shenzhen Coship Electronics Co.Ltd(002052) 2021 (annual report inquiry letter [2022] No. 121) issued by Shenzhen Stock Exchange on April 25, 2022. The company conducted serious verification and Analysis on relevant matters, and made written explanations and replies to the questions listed in the inquiry letter to Shenzhen Stock Exchange. The reply is hereby announced as follows:
1. On February 12, 2022, when your company replied to the concern letter of our department (company department concern letter [2022] No. 108), it said that the estimated operating income after deduction in 2021 was 1082688 million yuan. The company had pre communicated with the annual audit accountant on the deduction items and specific amount of operating income, and there was no difference between the two sides in this revenue estimation. On April 15, your company disclosed that the annual audit accountant fed back to the company that the “processing business” of RMB 9.0186 million that had not been deducted from the operating income may need to be deducted. It is estimated that the operating income after deduction in 2021 will be less than RMB 100 million. On April 20, your company disclosed the annual report, and the operating income after deduction was 992472 million yuan. Because the audited net profit was negative and the operating income was less than 100 million yuan, the company’s stock trading was warned of delisting risk since April 21.
(1) Please explain whether the company has made pre communication on the deduction items and specific amount of operating income, and whether the content of the company’s reply to our concern letter is true.
Reply of annual auditor:
Before replying to your letter of concern, Coship electronics had pre communicated with us on the deduction of operating income and the specific amount. The company’s reply to your letter of concern is true.
(2) During the reporting period, the gross profit margin of your processing business was – 60.78%. Please explain the specific development mode of the processing business, the reason for the negative gross profit margin and the rationality of the processing business, and ask the annual audit accountant to further explain the reasons for the change in the judgment of whether to deduct the business in combination with the business nature of the processing business and its relevance to the company’s main business.
Company reply:
1. Specific development mode of processing business
The company began to undertake external processing business in 2009, and Nantong Tongzhou, a wholly-owned subsidiary, has continued to undertake external processing business since 2016. The main business model is that the customer provides raw materials and auxiliary materials, the company provides processing services, uses a small amount of self owned auxiliary materials in the processing process, and finally produces finished products that meet the customer’s requirements. The processing revenue is recognized according to the processing quantity accepted by the customer and the corresponding unit price. In 2021, a total of 9.0186 million yuan of processing income was recognized. 2. Reasons for negative gross profit margin of processing business
The negative gross profit margin of processing business is mainly due to the following aspects: on the one hand, in 2021, the company’s orders decreased, the overall production output fell sharply, while the depreciation of fixed assets and amortization of intangible assets remained stable, resulting in a significant increase in the depreciation of fixed assets and amortization of intangible assets allocated to unit products, resulting in an increase in the cost of unit products; On the other hand, due to the decline of output, the average labor cost borne by a single processed product also increases, resulting in the increase of unit product cost.
3. Rationality of processing business
Processing business is a regular business project that the company has carried out continuously for many years. It has a stable customer base and has formed a stable business model. Customers and orders are continuous. Through years of practice, it has formed regional industry influence. While contributing operating revenue, it will also share some fixed costs and fixed expenses.
In the face of high unit cost, the company’s management team is strengthening fine management. On the one hand, it is expanding new high-quality customers, expanding orders, increasing sales volume and unit price; On the other hand, strengthen cost control, including but not limited to improving some equipment, applying management software, optimizing process flow, training and improving staff skills, and strive to reduce unit costs in many ways.
Reply of annual auditor:
The processing business of Tongzhou electronics is the business that Nantong subsidiary of Tongzhou electronics has been doing in recent years. The main process of the processing business is the placement of electronic components, that is, the installation of appropriate electronic components at the appropriate position of the circuit board. With the further deepening of the audit, we made a careful analysis on whether the processing business should be deducted based on the following conditions: 1. Although the processing business can directly use Coship’s main business to produce the production line and equipment of set-top boxes, the processing parameters need to be adjusted.
2. The customers of processing business are relatively concentrated, and one major customer no longer cooperates. We note that Coship’s processing business in 2021 mainly had two major customers, accounting for 81.43% in total, and the second largest customer accounting for 25.30% did not cooperate with the company after September 2021. The processing business of Coship electronics is obviously dependent on major customers, and the continuity of cooperation is also uncertain.
3. The products corresponding to the processing business are mainly TV boards and industrial equipment control boards, which account for a relatively small proportion of the main business products (set-top boxes) of Coship electronics. There is a certain judgment space for the correlation between the processing business and the main business of Coship electronics.
4. The processing business income has been accounted in other business income before 2021, and is deducted as a deduction of operating income when deducting the operating income in 2020.
Based on the above situation, although Coship electronics incorporated the processing business into the main business income account in 2021, due to the business nature of the processing business itself, there is a large room for judgment on its relevance to the main business, the continuity of the business and the stability of the business model, and whether it is deducted or not directly affects the delisting risk warning indicators of Coship electronics after deduction in 2021, In order to maintain the principle of prudence and maintain the consistency of the deduction principle, we suggest that Coship electronics continue to deduct the processing business income as the deduction of operating income in 2021.
2. At the end of the reporting period, your company’s asset liability ratio was 91.68%, an increase of 25.01 percentage points year-on-year, with a monetary fund balance of 146383 million yuan and a short-term loan balance of 501667 million yuan. During the reporting period, the net cash flow from your company’s operating activities was -348647 million yuan, and the cash flow from operating activities in recent three years was a net outflow. At the same time, the annual audit accountant will continue to issue an audit opinion with the paragraph “significant uncertainties related to going concern” on your company’s 2021 financial statements. Please explain in detail whether your company has short-term debt repayment risk and the specific measures your company plans to take to improve its financial situation in combination with the balance of monetary funds, short-term loan balance and cash flow from operating activities.
Company reply:
1. As of December 31, 2021, the details of current assets and current liabilities of our company are as follows:
Unit: 10000 yuan
Amount of current assets and amount of current liabilities
Monetary Fund 146383 short term loan 501667
Notes receivable 290.73 notes payable 581.93
Accounts receivable 971576 accounts payable 297500
Prepayments 303.84 contract liabilities 243265
Other receivables 136187 payroll payable 173343
Inventory 282270 taxes payable 571.96
Other current assets 323837 other payables 2451646
Non current liabilities due within one year 420.61
Other current liabilities 531.25
Total 19197093877996
The total current assets of the company are 191970900 yuan, the total current liabilities are 387799600 yuan, the current ratio is 0.50, and the current assets are 195828700 yuan less than the current liabilities.
(1) The company repaid the short-term loan of 50 million yuan in March 2022 and regained the new short-term loan.
(2) Other payables of the company to Shenzhen Tongzhou Gongchuang Investment Holding Co., Ltd. are 76.5 million yuan. In 2017, the company transferred the equity of Gongqingcheng lielong Technology Development Co., Ltd. held by the company to Shenzhen Tongzhou Gongchuang Investment Holding Co., Ltd. the company received part of the equity transfer payment of 76.5 million yuan, which is temporarily included in other payables until the equity transfer is completed. This amount does not need to be settled temporarily, which is not expected to have a significant impact on the liquidity of the company in the short term.
(3) Other payables of the company to zhongronghui financial asset leasing Co., Ltd. are RMB 909652 million. In 2015, zhongronghui Financial Leasing Co., Ltd. signed a factoring contract for accounts receivable with the company (hidden factoring without retroactive right). By the end of 2021, the amount of factoring payable was 909652 million yuan, which has not been paid by the company. As of the date of this reply, China Ronghui Financial Leasing Co., Ltd. has not collected, which is expected to have no significant impact on the liquidity of the company in the short term.
(4) The total amount of employee compensation payable is 173343 million yuan, of which 106217 million yuan is the labor union funds accrued in previous years. The company will make rational use of the labor expenses step by step according to the plan, and the rest is the salary and employee welfare in December 2021. It is expected that this amount will not have a significant impact on the company’s liquidity.
(5) The total amount of other current liabilities is 5.3125 million yuan, which is the balance of discounted (or unexpired endorsement) bills receivable reclassified to other current liabilities and the output tax of value-added tax to be written off. This amount does not need to be settled for the time being, which is not expected to have a significant impact on the liquidity of the company.
If the current liabilities described in (2) (3) (4) (5) above that will not have a significant impact on the company’s liquidity in the short term are not considered temporarily, the company’s current assets are 5.7168 million yuan less than current liabilities, which is basically balanced.
If the profitability and cash flow of the company continue to deteriorate or there is a large amount of liquidity demand in Item (2) (3) above, the company may not be able to realize assets and pay off debts in the normal process of operation, and there will be a risk of short-term solvency.
2. Specific measures to be taken to improve the financial situation
(1) Intensify efforts to promote the management of accounts receivable, identify payment collection pain points along the business process, strive to solve historical difficult payment collection, improve the efficiency of operating assets and supplement the inflow of operating cash under the guarantee of regular payment collection meeting mechanism and business and financial integration and coordination mechanism;
(2) Improve the main business structure, expand high gross profit businesses in set-top boxes, platform services, new energy and other fields, and improve profit margins;
(3) Continuously strengthen supply chain management, factory management and back-end delivery management, optimize and simplify the company’s internal processes, promote domestic alternative materials and reduce costs;
(4) Efforts have been made to broaden financing channels. At present, it has won the trust of some banks and guarantee companies, with a new short-term loan of 50 million yuan. In 2022, it will continue to explore financing schemes to ensure the sustainable and healthy development of business;
(5) Optimize the asset structure, dispose of idle assets and supplement operating funds;
(6) The company disclosed the non-public offering plan in August 2021, and the application materials for this non-public offering were accepted by the CSRC on May 9, 2022. The company plans to introduce new controlling shareholders for this non-public offering. If the company successfully completes this non-public offering, it will enhance the financial strength of the enterprise and lay a foundation for the sustainable operation of the company.
3. During the reporting period, your company achieved an operating revenue of 1392444 million yuan, a year-on-year decrease of 51.73%. The main products satellite TV user terminal equipment and cable TV access equipment achieved an operating revenue of 484542 million yuan and 299625 million yuan respectively, a year-on-year decrease of 22.97% and 74.59% respectively. The gross profit margin was – 3.46% and – 1.86%, a year-on-year decrease of 9.12 and 7.36 percentage points respectively. The net profit was -185721200 yuan, and the loss increased by 20.79% year-on-year.
(1) Please your father
